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The True Cost of Driving a Car.

One of the fun-not-fun things I get to do every year, at the start of the year, is do my car cost calculations for the tax stuff. The car we have (which stands in the garage most of the time) is owned not by us, or myself, but by my company, so its costs are part of my business costs.

I am, of course, allowed to use it for private things as well – but as it’s the company’s car, this counts, for all bureaucratic purposes, as something called “Leistungsentnahme – Nutzung von Gegenständen für Zwecke außerhalb des Unternehmens” (use of goods for purposes outside of business), and that, in turn, counts as part of the generated income… and that, in its own turn, is what I owe 19% VAT for.

If you are confused now, let me un-confuse you: I have a car (that I paid for), but if I use it for private purposes, I have to calculate the actual costs per kilometre, figure out how many km I have been driving for private stuff (which means keeping and then going through the vehicle log), calculate the value of that, and then pay the 19% of VAT of this value to the state. So I basically have to pay to use my own car… which is in some sense feeling so absurd that it makes me laugh a little inside every time.

The side effect of having a company car and having to do all this mathsy stuff on its costs? Getting a very, very clear picture of how much a klick of driving a car really costs. Now, mind you, our car gets relatively little use – I end up at significantly under 10,000 km per year, unless some really unusual, weirdly long journeys happen – and of course, figures can change. But if you’ve ever heard of the 0.3 € costs per km that are often used as a basis for calculating driving costs, and thought to yourself “well, that is way more than I pay”, you were probably falling into the same trap that I did before changing to company car. Most people only look at the obvious running costs, which is the fuel (and maybe the oil), but really, that’s just the tip of the iceberg. Yes, if you only reckon fuel costs, driving 500 km seems to cost very little in comparison to going with public transport, such as metro or train.

What gets forgotten, though, are all the other costs… and there are plenty of these. You have to buy the car. Insurance for the car is obligatory in Germany, plus there’s car taxes. Maintenance costs – regular checks to keep things running – as well as repairs. Costs for the garage. New tires, necessary once in a while. Possibly membership in some club for accident and breakdown cover. Costs for TÜV (regular vehicle inspection).

Which means that many years, our car has not cost .3 € per kilometre driven, but something in the range of .34-.35 €. This means ten km cost three € fifty – that’s a coffee in a café. Driving a hundred costs 35 €.

Of course, some of the costs per km will go down if you drive more. We have a diesel car, which becomes cheaper (because of high taxes, but low fuel costs, comparatively) if you drive more. (There are studies that come to the conclusion that electric cars are already the more cost-effective solution, though they do not state how many km per year they used as the basis for the calculations.) But then you will also have service intervals coming up faster, and there will be more wear and tear. So let’s say I drive more and can calculate with .3 € – even with this number as the actual costs, public transport will often be cheaper. If I manage to get a super saver price, it’s sometimes just a fraction of what the car would cost, less than half the price if I’m lucky.

Added bonus? If I’m sitting in the train, I can do whatever I want to. If I am sitting in the car, I have to drive. Maybe I can listen to some podcast on the side, but knitting or reading or writing are right out – which are all things I like to do during train rides. So if I can, I’ll use the train for travel.

Obviously, there are things where this is not possible, such as fairs, when I fill the car with stuff – but I’ve successfully lugged stuff for a workshop or a work meeting in the huge suitcase I have just for these purposes all through Germany and, indeed, across borders. That suitcase fits about 16 clamps plus a lot of extra stuff. It’s not fun to lug it up or down stairs when fully loaded, and not fun to run with it when the train is delayed and I have to hurry to catch the next one – but I still love being able to go to a work spot per train. I just try to see these things as free fitness training.

So – are you a train/public transport or car person? Have you ever figured out the true cost of your car kilometres?

This entry was posted in all the gory details, travel, work-related. Bookmark the permalink.

One Response to The True Cost of Driving a Car.

  1. inge says:

    I have been calcluating yearly non-fuel-costs for about 18 years now, and I’ve come out pretty much in the area of 2400 Euro a year before one drop of fuel is used. 1200 Euro of that is what I need to save to be able to pay for the next car. 500 Euro is insurance and taxes. 700 is check-ups, repair and replacements (some years it’s more, some years less, but 700 is a fair avarage).

    Fuel costs vary, obviously, by km driven, oil prices, luck, and the amount of water in the Rhine.

    Last year, all in all, costs were 0.39 Eu per km.

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